1998 (6) TMI 39 - HC - Income Tax

Summary

Issues:
1. Entitlement to interest under section 244(1A) of the Income-tax Act on excess payment of provisional tax.
2. Interpretation of the term "any order of assessment" in the context of section 244(1A) of the Income-tax Act.
3. Eligibility for interest in case of refund not only in appeal proceedings but also in other proceedings under the Act.

Analysis:
The Commissioner of Income tax filed a petition seeking direction to the Income-tax Appellate Tribunal to refer a question of law regarding the entitlement to interest under section 244(1A) of the Income-tax Act on excess payment of provisional tax. The Tribunal held in favor of the assessee, stating that the tax paid in pursuance of a provisional order of assessment is considered as tax paid under section 244(1A) of the Income-tax Act. The court agreed, emphasizing that the term "any order of assessment" includes provisional orders of assessment, meeting the statutory requirements for interest.

Regarding the interpretation of "any order of assessment," the court explained that the term should be broadly construed, encompassing not only regular assessments but also provisional orders of assessment. The court highlighted that the tax paid under a provisional assessment is considered a lawful demand and payment made in pursuance of an order of assessment, making the assessee eligible for interest under section 244(1A) of the Income-tax Act.

In determining eligibility for interest in case of refunds, the court clarified that section 244(1A) of the Income-tax Act covers refunds not only in appeal proceedings but also in other proceedings under the Act. The court emphasized that the term "any other proceedings" is wide and includes proceedings under related acts like the Surtax Act, as assessments under such acts depend on Income-tax Act proceedings. Consequently, the court upheld the Tribunal's decision, stating that the assessee had met all statutory requirements for interest under section 244(1A) of the Income-tax Act.

In conclusion, the court found no referable question of law arising from the Tribunal's order, dismissing the tax case petition and affirming the assessee's entitlement to interest under section 244(1A) of the Income-tax Act.